India-based crypto exchange WazirX recently announced that it will be gradually allowing its users to withdraw fiat currency, following a cyberattack that occurred on July 18. The hack led to the theft of a substantial amount of ERC-20 tokens, valued at over $235 million at the time. This unfortunate event resulted in the suspension of all trading and withdrawal activities on the platform as WazirX worked on assessing the damage and devising a recovery strategy. The stolen funds left the exchange unable to fulfill its crypto obligations to its users.
To address the situation, WazirX introduced a phased withdrawal plan that will give users access to up to 66% of their Indian rupee (INR) balances. This plan will be rolled out in two stages, with the first stage allowing users to withdraw up to 50% of the 66% limit of their INR balances between August 26 and September 8. The second phase will enable users to withdraw the remaining 50% of the limit from September 9 to September 22.
Legal Restructuring
Although WazirX confirmed that its INR reserves were not impacted by the cyberattack, approximately 34% of INR balances are still frozen due to ongoing investigations by law enforcement agencies. The exchange has assured users that these funds will be released once the investigations are concluded, although the timeline for this process remains uncertain. In addition to resuming INR withdrawals, WazirX is pursuing a legal restructuring plan to address the deficit in crypto balances resulting from the cyberattack. The exchange has chosen to go with a Singapore Scheme of Arrangement, a legal procedure that will allow it to present a restructuring plan to users, pending approval by creditors and the Singapore High Court.
WazirX emphasized the importance of the Scheme of Arrangement in ensuring a fair distribution of the remaining digital assets. The exchange plans to engage users in the decision-making process through polls and town hall meetings to gather their input and preferences. This move underscores WazirX’s commitment to transparency and fairness in handling the aftermath of the cyberattack. By involving users in the restructuring process, the exchange aims to rebuild confidence among its user base and navigate towards a more stable platform.
Rebuilding Trust and Stability
The decision to resume INR withdrawals signifies a significant milestone in WazirX’s journey towards stabilizing its operations and instilling trust among its users. The exchange has pledged to keep users informed at every step of the restructuring process and to prioritize fair outcomes for all parties involved. This proactive approach reflects WazirX’s dedication to navigating through challenges and emerging stronger on the other side.
Leave a Reply